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CP makes third offer for NS
From what I’ve seen of it, this looks to be another weak offer.
I think that if CP wants NS, they’re gonna need to ask their friend Santa for it because they don’t seem to be getting them otherwise.
I wish EHH and the hedge fund knuckle heads at CP would stop trying to take over the world and just run there railroad, and leave the NS alone. Now’s not the time for theses actions.
Does someone need to literally tell Harrison to go sit & spin on an asbestos-wrapped barrel cactus in order for him to get the message?
…and with this announcement, NS stock went down, down, down. The market was underwhelmed .
Seems that Harrison is that determined to kill the 21st Century Steam program and heritage units.
There is a lot more to a railroad than just money and investors !
There are 2 US Class 1s and 2 Canadian Class 1s in the Northern half of the US, from the East Coast to the Mississippi River; NS, CSX, CP & CN. Hunter Harrison you merge NS and there’s Canadian Railroad (pardon me RAILWAY) Monopoly! CSX would then be the last remaining US Class 1 in the whole Eastern half of the US! BUT I’d be DARNED if Union Pacific would start courting CSX for a merger! I still say split Union Pacific, it’s the one railroad I’m not very found of and Canadian Pacific is right there with them, too!
NS didn’t respond to the offer, but the market did. NS stock went way down. I guess the market as a whole isn’t as enamored with EHH’s cult of personality the way Ackman is…
If I can be indulged in a repost from a few days ago, I think these thoughts remain germane. NS is under intense pressure to cave. If Fred Frailey is right that is precisely what they will be forced to do–and alas–because there is nothing in this proposal except a one-time only bonanza for large holders of NS stock.
The residual holders of the combined company will be saddled with a pile of new debt, very few provable savings from the elimination of duplicate operations (because there basically aren’t any) and an operating plan that once again repeats the old railway era of going for deferred maintenance and investment over the long-term value enhancement of the property and the stock-holders.
At its most basic core the much larger (and still very prosperous) NS ends up as a 47% owner of a debt-saddled company owned by the much smaller CP, on the basis of the argument that one man’s “genius” at squeezing employees, investment and service is better than NS long-term health. My earlier thoughts from a Frailey blog posting last week follow.
"I’d like to share observations on the NS/CP merger I first posted on the Fred Frailey blog that described Harrison’s management approach. While this time I disagree with Mr. Frailey I strongly suggest a reading of his typically insightful column.
The CP plan for the take-over of NS is based on many flawed assumptions, but fundamentally and at its core the main problem is that there are almost no synergies to be gained by eliminating duplicate routes or terminals. Rather the entire proposal is based on what Fred outlines, but interprets very differently from me, the cult of personality built around Hunter Harrison and his laser focus on cost-cutting and what he sees as operating efficiency.
Harrison’s preference for scheduled freight operations is sound (in some cases) and echoes what the D&RGW did in the last 20 years of its existence to compete with the UP’s faster route across
I’ve come up with the best idea yet! BNSF, CSX, Norfolk Southern and Canadian National SPLITTING Canadian Pacific, and getting rid of the pain: Hunter Harrison!
Now there’s an idea!
Show me the monnnneyyy.
@ Frederick Fine, the “Pacific” in both CP and UP should really be read as “Pathetic” …
@Merrill R Perkins, That’s the truth! It’s more so with Canadian Pacific than Union Pacific. Harrison just wants to get rid of some competition and get greedy. With the Canadian Government investigating CP, the so-called merger with NS will more than likely never happen, because Harrison’s all ready in HOT water over safety issues on the CP. Seems to me he could care less about his employees or NS’s or even safety in general!
@Josh Monroe, Norfolk Southern is my second favorite railroad next to CSX (Conrail is STILL my favorite all time railroad). The biggest thing I hate about the “merger” w/ CP, is say goodbye to the Heritage Units AND the SD45-2’s! Canadian Pacific locomotives on Horse Shoe Curve or in the South in general, NO WAY! They would look way out of place in Kentucky and Tennessee let alone Florida! Splitting Canadian Pacific (Canadien Pacifique - French speaking) would provide MORE competition Up in Canada. THAT makes more sense! I question Hunter Harrison’s leadership of CP, AND when he was at Canadian National. He needs to resign and never be heard from again!